The core issue here isn't how much inflation there is, but that the Federal Reserve has started to send mixed messages.

On one hand, they say 2.3% indicates cooling, while on the other hand, they point to 3.3% as still rising, effectively creating a wavering expectation about whether they will loosen policy soon.
The market fears this most—not high inflation or low inflation, but the lack of a unified direction.
You'll see a very typical rhythm:
Expectations of rate cuts just rise, then are pushed back by another set of data;
Just when it seems like tightening will continue, someone comes out saying inflation is improving.
Back and forth, the rhythm is torn apart.
In this environment, trading becomes very short-term; many people don't dare to hold long positions because they don't know which side will speak next.
And if these disagreements drag on without resolution, it means policy won't be decisive either—neither will they loosen immediately nor dare to slam on the brakes hard.
The market gets stuck in a state of limbo, being pulled back and forth by data and speeches.
#美联储 # Expectations of rate cuts #Market sentiment